Insights

A mortgage stress test is used by lenders to assess your financial position and see how rising interest rates would affect your ability to meet repayments. It ensures that borrowers can afford the mortgage even if rates increase.

DTI stands for Debt to Income, a ratio that compares your total debt to your income. This ratio is one of the ways lenders assess your capacity to take on and repay a mortgage

Yes, it matters. Lenders look at the total of all your credit limits, not just your outstanding balances. This is because they assume you could use your full limit at any time, increasing your risk.

A redraw facility allows you to make extra repayments on your mortgage and then withdraw those funds if needed. It can help reduce interest, while giving you flexibility to access funds if required.

Property equity is the difference between the market value of the property and the amount still owed on the mortgage. As you pay off your loan and as your property’s value increases, so does your equity.

An interest-only loan allows you to repay only the interest on the loan for a set period, usually between 1-5 years. This reduces your repayments in the short term but doesn’t reduce the principal balance of the loan.

A bridging loan is used to cover the time between purchasing a new property and selling your current one. It provides you with short-term funds to complete the purchase before your existing property sells.